New Set of Rules For Crowdfunding In EU

The European Parliament’s Economic and Monetary Affairs Committee voted on 5 November 2018 to provide a single set of rules on the provision of crowdfunding services.

Thirty-eight votes in favour to 5 with no abstentions allowed to adopt a text to help crowdfunding services to function smoothly in the internal market and to foster cross-border business funding in the EU. But, what’s in it?

1. Threshold

Entrepreneurs can ask for more money. In fact, Economic and Monetary Affairs Committee MEPs agreed to increase the maximum threshold for each crowdfunding offer to €8 million from €1 million calculated over a period of 12 months, a press release reads.

2. Protecting Investors

In order to protect investors, crowdfunding platforms should:

Give clients clear information about financial risks and charges related to their investment, including insolvency risks and project selection criteria;

Disclose the default rates of the projects offered on their platform every year;

For each project, provide prospective investors with a key investment information sheet drawn up by the project owner.

3. Conflict of Interests and Complaints

Crowdfunding platforms will have to:

Disclose any investment in any crowdfunding offer on their platforms;

Ensure that clients are able to file complaints against them free of charge.

4. National Authorities in Charge

MEPs agreed that a prospective crowdfunding platforms would need to request authorisation from the national competent authority of the member state in which it is established.